The Dollar index was steady in N.Y. trade on Wednesday, though ranges were relatively narrow. Market concern over the caronavirus ramped up after reports there were more new cases of the disease outside of China than inside China. German Health Minister Spahn said Germany is at the beginning of a coronavirus epidemic, adding that "The infection chains are partially no longer trackable, and that is a new thing." These new details saw Wall Street's sharp opening gains vaporize later in the session, an Treasury yields pull back to record lows EUR-USD traded between 1.0855 and 1.0894, as USD-JPY pulled back from 110.70 highs, dipping later to 110.20. USD-CAD headed over 1.3330 as oil prices fell to 13-month lows. Cable dipped to 1.2900 lows from early highs near 1.2950.

[EUR, USD]EUR-USD was choppy through the N.Y. session, peaking at 1.0905 into the open, a two-week high, then falling to 1.0855, before heading over 1.0890 into the London close. In Germany, the health minister said the country is at the start of a coronavirus epidemic, saying the “infection chains are partially no longer trackable, and that is a new thing.” This may have put some weight on the Euro at mid-morning. Meanwhile, in the U.S., president Trump will give a press conference at 6:00 EDT to discuss the virus. Markets overall remain nervous, and volatility is likely here to stay for the time being. EUR-USD implied volatility is at a four-month high.

[USD, JPY]USD-JPY topped out at 110.70 early in the session, responding to the opening surge on Wall Street. The pairing has since fallen back to 110.29 lows, as stocks gains all but disappear. Coronavirus fears remain front and center, as markets continue to get mixed signals from various governments on the epidemic. New China case growth appears to be slowing, while new cases elsewhere in the world are on the rise. Germany's health minister said the country is facing a "coronavirus epidemic", while the first case in South America was reported earlier today. As a result, the risk-sensitive USD-JPY will continue to be a barometer of market angst.

[GBP, USD]Cable fell from 1.2948 highs early in the session to 1.2900 after the London close. News that the government is delaying its 2020-21 budget presentation has increased market expectations that itis delaying plans for fiscal expansion until later in the year. The BoE had cited among its reasons to refrain from cutting rates in January was the expectation for looser fiscal policy. Positioning in the OIS market implies that markets are pricing in a chance for a 25 bp BoE rate cut, which would take the repo rate to 0.50%, as early as the March-26 Monetary Policy Committee meeting, with such a move fully priced in for the August-6 MPC gathering.

[USD, CHF]EUR-CHF fell to 4 1/2 year lows of 1.0588 earlier in the week, with the safe-haven franc rallying on the back of the spreading coronavirus epidemic. Switzerland reported its first case of the disease earlier today. U.S. health officials appear to have upped their concerns over the virus, with a U.S. CDC official saying “Ultimately we expect we will see community spread in the United States. It’s not a question of if this will happen but when this will happen and how many people in this country will have severe illnesses.” The Swiss franc can be expected to continue to rise.

[USD, CAD]USD-CAD bottomed at 1.3269 early in the session, since rallying to 12 session highs of 1.3217. WTI crude prices are off their 13-month lows seen into the North American open, but remain heavy overall, which has weighed on the CAD today. Indeed, crude prices later fell to 13-month lows under $48.65, allowing USD-CAD to rally over 1.3325. The February 10, 4-month high of 1.3333 will be in the cross hairs now, and a break above there is liable to trigger buy-stops reported from 1.3335.